At some point, you'll need to share your idea with others
who can help you. This can be very frightening. Who can you trust?
How do you find the right people to do business with? Let's be
candid. You may be inexperienced in many areas of business, so you
are a likely target to be taken advantage of. Well, here is some
help.

First, let me say there are many respectable people with whom to
do business. Many individuals will go to great lengths to be fair
and honest. At some point, however, most of us will come in contact
with less-than-scrupulous people. To protect yourself, you need to
know the signs and what to look out for.

Blatant crooks who will steal your idea are not very common.
More common are people who charge for useless and unnecessary
services, give unusually high quotes for work, tie up your idea
without doing anything with it, or analyze your intellectual
property and develop a legal knockoff. These people are especially
dangerous because the law won't necessarily protect you from
them.

The possibility of someone stealing your idea is a very real
concern, but probably not in the context you initially imagine.
Instead, they will wait in the bushes and watch while you do all
the work and spend money advertising and marketing your idea. The
moment it becomes successful, they'll arrive on the scene to
catch the wave of your success and sell your idea for less.

Tomima Edmark is the inventor of the TopsyTail and several
other products and is author of The American Dream Fact Pack
($49.95), available by calling (800) 558-6779. Questions
regarding inventions and patents may be sent to "Bright
Ideas," Entrepreneur, 2392 Morse Ave., Irvine, CA
92614.

Know The Type

There are basically three types of companies to be wary of:
invention development companies, knockoff companies and
large corporations.

1.Invention development companies.
If you've been looking through inventors' magazines,
you've probably seen their ads. An invention development
company or invention marketing company offers to help you make your
idea a reality for a fee (usually upfront) and a percentage of the
profits. These companies provide services such as a patent search,
marketing reports, and development and distribution contacts, and
their sales approach is usually high-pressure. They'll flatter
you by telling you how great your idea is and play on your sense of
guilt because you don't have what it takes to develop your
idea. Steer clear of these kinds of companies.

2. Knockoff companies. You won't find these
companies in the phone book under "Knockoff." They
specialize in finding successful products in the marketplace,
making another version of it and distributing it to retailers. They
vary in sophistication from a one-person company with a P.O. box
and a foreign connection to a manufacturer to multimillion-dollar
companies that pay their attorneys to advise them on how to
manufacture a product without violating your patent.

These companies fit a profile you should watch out for. Their
product lines are generally less expensive versions of products
made successful by other companies. The names of their products are
very similar to the originals. Most of the time, their products are
manufactured "off-shore," meaning in a country where
labor is cheap, and they will more likely be privately owned,
rather than publicly traded. They will not necessarily market the
product under their company name but will private-label it for a
store. They generally do not use registered or trademark symbols on
their products.

You don't find these companies--they find you. They have
representatives who attend trade shows. They monitor infomercials,
home shopping channels and catalogs looking for the next product to
knock off. Another sad reality is that many times retailers team up
with them. The retailer gives them a product that is doing well,
and the knock-off company makes it for them under the store's
name.

3. Large corporations. The large corporation that
markets a copy of your idea is a formidable adversary. It has
strong brand names and established relationships with store buyers
so they are able to distribute a product quickly and in larger
quantities than you.

These companies have many advantages over you. In fact, many
times these companies have been assigned or have purchased shelf
space from retailers. You, on the other hand, are most likely a new
vendor with the retailer. You'll have to negotiate to get your
product in the store, which can take as long as a year.

The good news is big companies also have the Goliath syndrome:
Everything they do is expensive and done on a large scale.
Therefore, they aren't going to develop a new product unless
they are sure it's going to sell in big numbers. The likelihood
of your idea being copied by these companies in the beginning is
very low. It's when your idea becomes a success that the big
guys will want it.

Partnering Up

There is no guaranteed method for determining a potential
business partner's legitimacy other than to do business with
them. You can increase your chances of finding good people,
however, if you take the proper precautions and consider the
following tips:

1. Check references. Any legitimate person or
company is more than happy to provide references--and more than
one. If they are not, or have excuses why they can't, you
should see this as a red flag.

2. Find other references. A company will give you
its best references. It's also helpful to find others who have
done business with the firm. In conversations, make note of people
or firms the company mentions having done business with. Later, ask
if you may call them. If there was a problem, the good business
tells you up front and explains its side.

3. Get industry referrals. I have found that if you
can hook up with one good person in the industry, he or she knows
who the other good people are. For example, my injection molder,
who is trustworthy, has referred me to several other companies,
which have all been very reputable.

4. Don't pay in advance. If someone is going to
represent you, he or she should work on a percentage basis with no
upfront fees (with the exception of out-of-pocket expenses). If
someone is going to make something or provide services, only a
partial payment, if any, should be required upfront.

5. Don't immediately choose the "Big
Name." Many people feel if they use the largest law firm,
the biggest printer and the dominant supplier, they'll be safe.
The truth is, you will be a very small account to them and possibly
get lost in the shuffle. When starting out, I've found it's
best to find a small but reputable company that is hungry for your
business. If you are trying to find financing, however, it can be a
plus to have a large or well-known business partner to add
credibility.

6. Visit the company's location. You can learn a
lot from just looking around. Is the company organized? Does the
place look safe to work in? Do the employees appear happy? Is the
environment friendly? Are they willing to take you on a tour?

7. Find a "player." A player is a person
or company that has been in the business for a number of years. It
is a pretty good bet that if they've been around for a while,
they are legitimate. Players can also help you in ways you might
not have considered. One player I used was very connected with city
hall; through this person, I was introduced to people who have been
very helpful to me.

8. Don't agree to long-term contracts. Personal
managers and agents deserve some protection if they are going to
invest in you and your idea; however, they should also be able to
prove themselves within a year. A contract should have a reasonable
escape clause should you not see results or feel uncomfortable
working with them.

9. Create a relationship. On a first date with
someone, you are friendly and on your best behavior. If you want
your spouse to do something, you finesse him or her. These are the
same skills you should use when you establish a business
relationship. I have had several business partners jump through
hoops for me to help me make a deadline. They didn't have to,
but they did because I had a good relationship with them.

10. Don't work with friends or family. Time and
time again, I have seen friendships and families fracture because
they worked together. Think twice before doing this.

11. Don't allow yourself to be pressured. Some
companies may offer to give you a discount if you agree to do
business with them at the first meeting. Others might try to scare
you by saying raw material prices are going up or they have an
opening to do your work but need an answer right away. Any
respectable business will agree to let you sleep on it before
making a commitment.

12. Remember the old adage "If it sounds too good
to be true, it probably is."

In developing your idea, you'll eventually need the
assistance of others. Be careful and thoughtful when selecting
business partners, but don't be afraid to risk. The American
dream cannot be achieved without taking some chances.

Creating a MAP will take no more than an hour of your time every month and will keep the lines of communication open, ensuring relationships with investors remain strong, and ultimately helping early-stage startups succeed.